Student loan deal could move quickly

A compromise to roll back the recent doubling of student loan rates could move swiftly through Congress, keeping students from having to pay a higher rate at the start of the school year.

Senate Majority Leader Harry Reid said Thursday morning that it was possible the Senate could pass the new bill as soon as Thursday before senators headed home for the weekend after voting on nominees to head the Labor Department and Environmental Protection Agency.

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“There’s been wonderful bipartisan discussions. The legislation presented to me isn’t everything I want, but it’s a work Democratic and Republican senators working long, long hours,” Reid said, noting a lengthy meeting with a bipartisan negotiating group at the White House on Tuesday with the president. “We need to make sure that legislation gets done before we leave here.”

House Speaker John Boehner also expressed optimism that the Senate deal will get a vote in the House.

“I haven’t seen the details of it, but clearly it follows the structure of the House bill,” Boehner told reporters on Thursday. “It’s a market based reform, a market-based rates, similar to what the president called for and the House already passed. So when we see the details, I’m hopeful that we’ll be able to put this issue behind us.”

The bill would tie student loan rates to 10-year Treasury notes, which would result in rates of less than 4 percent for new loans made this year for undergraduate students. It also caps rates at 8.25 percent for undergrads, 9.5 percent for graduate students and 10.5 percent for loans to parents, a key victory for Democrats looking to limit students’ costs as interest rates rise in future years.

A key difference between the House version and President Barack Obama’s proposal — the Senate deal keeps interest rates the same for the life of the loan. Republicans had proposed having the rates reset every year, a provision that Obama and the Democrats deemed unacceptable.

On July 1, rates were allowed to double from 3.4 percent to 6.8 percent after weeks of negotiations failed to produce a compromise.